By the middle of Wednesday's trading session the EUR/UD continued its decline, as it was forecast on Tuesday.
Moreover, it is expected that the currency exchange rate will continue to decline until it reaches the support of the weekly S1 at the 1.1139 level.
The European Common Currency depreciated against the US Dollar, following the German Flash PMIs data set release on Thursday at 01:30 GMT. The EUR/USD exchange currency rate lost 11 pips or 0.10% right after the release. The Euro continued trading at the 1.1140 level against the Greenback.
Markit released the German Flash Manufacturing PMI data, which came out worse-than-expected of 44.3 compared with forecast 44.9. Also, note, that the German Flash Services PMI was released at the same time.
Phil Smith, Principal Economist at IHS Markit, commented on the release: "At 52.4, the headline Germany PMI remains in modest growth territory in May, indicating that the economy is course to see sustained expansion in Q2 following the rebound of GDP in the opening three months of the year. It is manufacturers who remain the most downbeat about the outlook amid lingering global trade tensions, though the survey highlights that fears of a slowdown may have started to spread to services, where confidence is now at its joint-lowest since 2014."
Three important events during the week
This week there are three notable events on the economic calendar that traders will watch.On Wednesday, the markets will watch the Bank of Canada Rate Statement at 14:00 GMT. This event has caused since October 2018 moves from 67 to 93 base points on the USD/CAD.
It is currently the top creator of sudden volatility in the markets.
On Thursday, at 12:30 GMT the US Preliminary GDP will be published. This event, which is considered and shown on the calendars as a top mover, has not caused notable moves.
Since November 2017 this event has caused on the EUR/USD moves from 6.8 to 11.9 pips during the five minutes after the release. Note that a move below ten pips on the EUR/USD during five minutes happen often without any data being published.
The week will end with the Canadian GDP publication at 12:30 GMT. This event has caused moves from 21 to 64 pips since December.
EUR/USD hourly chart's review
Yesterday, the EUR/USD currency pair declined to the psychological level at the 1.1160 mark.Given that the pair is pressured by the 55-, 100– and 200-hour SMAs, currently located in the 1.1172/1.1184 range, it is likely, that bears could prevail in the market in the short term. A possible downside target is the weekly S1 at 1.1138.
If the given support does not hold, it is expected, that the exchange rate could decline to the 2018/2019 minimum at 1.1124. Otherwise, it is likely, that a reversal north could occur.
It is unlikely, that the rate could jump higher than the 1.1200 mark due to the resistance of the Fibonacci 38.20% retracement.
Hourly Chart
On the daily candle chart, it could be seen that the rate bounced off the support of a dominant pattern near 1.1100.
In theory, the pair should eventually reach the 55-day simple moving average and the resistance trend line near 1.1240.
Daily chart
Traders continue to short the EUR/USD.
Since Friday, 68% of all open position volume on the Swiss Foreign Exchange was in short positions.
In addition, trader set up pending orders in the 100-pip range were bearish. Namely, 57% of all orders were to sell.